Why Merck Stock Has Risen 28.2% Year-to-Date



Merck’s stock price movements

Merck (MRK) stock has risen from $54.93 on January 2 to $70.42 on September 18—a 28.2% increase year-to-date. The performance of Merck stock has been closely related to the sales, clinical trial outcomes, and regulatory decisions for the company’s leading immuno-oncology drug, Keytruda.

Approved in 13 indications and eight tumor types, Keytruda reported sales of $1.7 billion in the second quarter. The drug already leads the immune-oncology segment in the United States in terms of new patient starts. This trend has been driven by the increased uptake in multiple indications such as metastatic lung cancer, bladder cancer, and microsatellite instability-high cancers.

The chart above demonstrates Merck’s oncology strategy, which is a key growth driver for the company’s stock price in 2018.

In addition to Keytruda, news about the company’s major drugs—including LENVIMA and LYNPARZA—as well as key assets in the animal health, hospital, and vaccines segments also affect Merck’s stock price.

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Merck’s stock price trending up

Since Merck’s (MRK) latest quarterly earnings release on July 27, the company’s stock has risen 11.67%. The company reported revenues of $10.47 billion for the second quarter, which was a YoY (year-over-year) increase of 5.4%. This exceeded the consensus analyst estimate by $180.0 million.

Merck also surpassed the consensus analyst estimate for EPS by $0.03, reporting EPS of $1.06 in the second quarter. This solid financial performance has been a key factor in the company’s stock price movement.

Merck stock has risen 1.04% from August 20 to September 18. However, this return is lower than the SPDR S&P 500 ETF’s (SPY) 1.83% return and the Health Care Select Sector SPDR ETF’s (XLV) 2.56% return.

In the next article, we’ll discuss the opportunity for Keytruda in its lung cancer indication.


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